"Traditionally the SEC doesn't comment on regulatory actions," Donaldson said. "We continue to look at the supervision area. It's not a closed door as far as we're concerned."

The SEC began the investigation into analyst supervision in 2003, two months after Citigroup analyst Jack Grubman and Merrill Lynch's Henry Blodget were barred from the industry in a $1.4-billion research-conflicts settlement that covered 10 Wall Street firms. In May, the federal securities regulator issued subpoenas to the brokerages for e-mails and other documents written by people who supervised stock analysts and bankers.

Since then, Donaldson hasn't commented on the status of the investigation. His remark was in answer to a question after a speech at the Society of American Business Editors and Writers conference in Fort Worth.

Donaldson said the SEC also was considering rules requiring hedge fund management firms to register with regulators so that they would be subject to investigative procedures that have figured in probes such as the agency's investigation of market timing in mutual fund trades.

He said compensation in the industry, which controls $800 billion in assets, was so lucrative that it was an "accident waiting to happen." The size of hedge funds' assets makes understanding their effect on markets a major concern for the chief regulatory agency assigned to monitor trading in U.S. stocks.

Donaldson said the SEC was more concerned with hedge fund investments by pension funds than those of big investors such as George Soros.

"It's not just a rich man's game," he said.

Donaldson said the SEC hoped to implement 12 new rules governing the mutual fund industry by the end of July.

"What's good for a mutual fund shareholder isn't necessarily good for a mutual fund manager," he said, adding that the rules address this "fundamental conflict."

In addition to late trading and market timing, Donaldson said regulators wanted to address the governance of mutual funds, ethics and transparency.

"The issue here, we believe, is disclosure," he said. "We're not trying to manage [mutual fund] fees. We believe the competitive marketplace should bring these fees to the level they should be at. It's not our role to determine how much they should be."